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Commentary: Wean pig and swine facility insights

This market update is a PorkNetwork weekly column reporting trends in weaner pig prices and swine facility availability. All information contained in this update is for the week ended May 31, 2013.

Breakeven price for a weaner pig was $19.18 based on closing futures prices on May 31, 2013 and the assumptions outlined below. The breakeven price is down $3.05 from last week.

Margin over variable costs was $41.98 and refers to the revenue generated from raising a weaner pig that contribute to fixed costs and pig purchase costs. In other words, if the alternative is to idle facilities every dollar between the purchase price and margin over variable costs contributes toward covering those fixed costs such as facility, labor, utilities, property taxes and insurance.

For the Week Ended

5/31/2013

Weekly Change

Weaner pig breakeven

$19.18

(3.05)

Margin over variable costs

$41.98

(3.05)

Pig purchase month

Jun, 2013

Live hog sale month

Dec, 2013

Lean hog futures

$80.70

0.80

Lean hog basis/cwt

($4.50)

0.00

Weighted average sbm futures

$409.94

24.63

Weighted average sbm basis

$30.56

(4.21)

Weighted average corn futures

$5.83

0.29

Weighted average corn basis

$0.14

(0.01)

Nursery cost/space/yr

$36.00

0.00

Finisher cost/space/yr

$42.00

0.00

Other feed cost

$24.50

0.50

Assumed carcass weight

205

0.00

Note that the weaner pig profitability calculations provide weekly insight into the relative value of pigs based on assumptions that may not be reflective of your individual situation. In addition, these calculations don’t take into account market supply and demand dynamics for weaner pigs and space availability.

National Direct Delivered Feeder Pig Report

Cash traded weaner pig reported volume was 44 percent lower with 31,500 head trading. Reported cash prices were up $0.48 per head from the previous week at $25.65 and the low to high spread was $10.00.

Cash sale weaner pig volume

31,500

Weighted average cash price/head

$25.65

Cash low price/head

$19.00

Cash high price/head

$29.00

The number of reported weaner pigs sold on a formula basis was down 35 percent with 36,417 head being reported at an average price of $37.61 which is up $1.17 per head from the previous week.

Facility Spaces

As listed on ePigflow, there were 94,220 finishing spaces available and 3,600 nursery spaces available. For total available space of 97,820 on a combined basis which is up 15 percent compared to the previous week.

Ryan Cooney is general manager of ePigflow, an online market for weaner pigs, feeder pigs and facility spaces. You can find available pigs and facilities by visiting www.epigflow.com.